Tata Communications today announces its financial results for the quarter ended September 30th, 2019
Highlights | Q2 FY2020
Data services portfolio
- Strong growth in Data business; revenue grew by +10.7% YoY on the back of robust performance in Traditional services and Transformation services portfolio, despite industry headwinds
- Data EBITDA was at INR 752.4 crore (USD 106.8 Mn); up +40.0% YoY led by strong growth in Traditional services and profitable gain in Growth services
- Traditional services saw a robust growth in revenue and profitability; revenue grew by +7.2% YoY and EBITDA grew by 40.0% YoY with margins at 37.8%. Within this portfolio, the India business has regained momentum after being affected by operator consolidation last year
- Growth services continue to scale and witness profitable growth; revenue grew by +13.7% YoY. We are witnessing operating leverage in this portfolio; EBITDA grew by +33.2% QoQ with a margin expansion of 90 Bps
Consolidated financial highlights
- Consolidated revenue was at INR 4,273 crore (USD 607 Mn); growth of +5.0% YoY on the back of continued improvement in Data business
- Consolidated EBITDA at INR 833.7 crore (USD 118.4 Mn); increase of +32.3% YoY on the back of strong growth in Traditional services and margin expansion in Growth services
- Consolidated PAT at INR 53.9 crore (USD 7.6 Mn) as compared to a profit of INR 1.6 crore (USD 0.4 Mn) in Q2 FY19
- CAPEX for this quarter was USD 65 Mn as compared to USD 45 Mn in Q1 FY20
“As the market continues to evolve at an unprecedented rate, the need to accelerate digital transformation across all layers of the enterprise is the reality businesses face to remain competitive today. Our focus on providing digital infrastructure solutions that align with this customer need is showing results. This is evident in the growth and profitability of our Data business which now drives 79% of business revenues. By being a part of our customers’ digital journeys, we remain committed to steering the business towards sustainable profit and ultimately, demonstrable stakeholder value.”
A.S Lakshminarayanan, MD and CEO - Designate, Tata Communications
Commenting on the results, Pratibha K. Advani, Chief Financial Officer, Tata Communications, said, “We have witnessed a robust trend over last few quarters with strong financial performance delivered across all key parameters. Our Data business has continued to witness strong performance in revenue as well as profitability, despite industry headwinds. We have a strong order book and we expect this trend to continue as we keep executing on large deals.
Communication infrastructure needs of enterprises have evolved and digital transformation is the focus area. Robust growth in our Enterprise business of 10.8% shows that we have established ourselves as a preferred digital transformation partner.”
An investor fact sheet providing detailed analysis of the results for the quarter ended September 30th, 2019 has been uploaded on the Tata Communications website and can be accessed here.
Business highlights | Q2 FY2020
- Cisco and Tata Communications: Tata Communications and Cisco expanded their partnership to offer enterprises a secure, fully-managed, multi-channel, intelligent and cloud-based Cisco Webex Contact Center solution. This joint offering is an end-to-end managed solution with global reach enabled by Tata Communications’ global digital infrastructure and managed services expertise, which companies of all sizes can now leverage for competitive advantage.
- Microsoft and Tata Communications: Tata Communications expanded its global relationship with Microsoft with the addition of managed services capability for Azure Virtual WAN. Enterprises worldwide can now combine IZO™ Internet WAN with the Microsoft global network to connect employees seamlessly and securely to cloud-based applications and data through the new managed service. Through the IZO™ SDWAN service, enterprises can gain greater visibility and control over this hybrid network infrastructure. Tata Communications is one of the first partners to leverage a new Azure Service Provider Management Toolkit, launched at Microsoft Inspire, as part of the Azure Networking Managed Services Partner (MSP) Program
- Thales and Tata Communications: Thales, a global leader in digital security, and Tata Communications are working together to develop a secure global IoT connectivity solution. Tata Communications MOVE™ mobility and IoT platform and Thales’s T-Sure warranted digital identity offering is set to unlock the value in data generated by connected devices such as cars and trucks, whilst maintaining the integrity and security of IoT data
- CreditPilot and Tata Communications: CreditPilot, a financial technology company specialising in digital and mobile financial services, transactional and payment infrastructure, and Tata Communications have come together to offer mobile and digital financial services solutions to mobile operators. Under the terms of a joint Engagement Agreement (EA), Tata Communications and CreditPilot will form a joint task force to assess the integration of the provision of financial services with the Tata Communications MOVE™ – Mobile Virtual Network Operator Enabler (MVNE) platform
- Hedera Governing Council: Tata Communications joined the Hedera Governing Council, an enterprise-ready distributed ledger platform which comprises up to 39 multinational entities from a diverse array of industries
- Tata Communications and Neeco: Neeco Global ICT Services, a leading global provider of complex ICT services announced that it is now a customer of Tata Communications and will deliver Internet of Things (IoT) services for enterprises in Europe
- Focus Softnet and Tata Communications: Focus Softnet, a leading software development and enterprise applications provider, has partnered with Tata Communications to host its cloud-based ERP solutions on Tata Communications’ IZO™ Private Cloud platform
- Tata Communications’ NetFoundry: NetFoundry™, a software and business developed as part of Tata Communications’ Shape the Future innovation and entrepreneurship programme, was officially launched as an independent subsidiary within the Tata Communications Group. NetFoundry passed the $1 million USD annual recurring revenue (ARR) milestone in less than two years of selling its services, growing ARR by over 50% on a quarter-over-quarter basis for the past three quarters. Through this spin-off, Tata Communications aims to help the North Carolina-based company to accelerate its growth further
- The European Tour Innovation Hub: The European Tour and Tata Communications launched an innovation contest that calls on start-ups around the world to develop creative new solutions and concepts to enhance the game of golf. The European Tour Innovation Hub with Tata Communications aims to find ideas that can be developed commercially with support from the Tour’s business development team, venture capital (VC) firms and Tata Communications with the winning solution tested in action during the 2020 season
- DRIVE week, Tata Communications’ company-wide tools-down day that unites employees across geographies to serve the common goal of giving back to society, saw 7,700 volunteers this year; contributing a cumulative of 44,238 hours of volunteering and touching 47,139 lives across countries. DRIVE week is a movement at Tata Communications that focuses on a clear strategic objective of serving the communities in which we operate
Growth services include IZO™, Managed Hosting, Managed Security Services, Broadcast, Video Connect, SIP Trunking, Global Hosted Contact Center, Video Streaming, Mobile New Services, Healthcare, Media Management and Mobile Innovation.
Traditional services include Virtual Private Network, International Private Line, Internet Leased Line, Ethernet, Internet Protocol –Transit, Inmarsat, Content Delivery Network, National Private Line, Mobility, Data Centre, Unified Collaboration and Conferencing
About Tata Communications
Tata Communications is a leading global digital infrastructure provider that powers today’s fast- growing digital economy.
The company’s customers represent 300 of the Fortune 500 whose digital transformation journeys are enabled by its portfolio of integrated, globally managed services that deliver local customer experiences. Through its network, cloud, mobility, Internet of Things (IoT), collaboration and security services, Tata Communications carries around 30% of the world’s internet routes, and connects businesses to 60% of the world’s cloud giants and 4 out of 5 mobile subscribers.
The company’s capabilities are underpinned by its global network, which is the world’s largest wholly owned subsea fibre backbone and a Tier-1 IP network.
Tata Communications Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India, and it serves customers in more than 200 countries and territories worldwide through its technology capabilities and partnerships.
Forward-looking and cautionary statements
Certain words and statements in this release concerning Tata Communications and its prospects, and other statements, including those relating to Tata Communications’ expected financial position, business strategy, the future development of Tata Communications’ operations, and the general economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, including financial, regulatory and environmental, as well as those relating to industry growth and trend projections, which may cause actual results, performance or achievements of Tata Communications, or industry results, to differ materially from those expressed or implied by such forward-looking statements. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements include, among others, failure to increase the volume of traffic on Tata Communications’ network; failure to develop new products and services that meet customer demands and generate acceptable margins; failure to successfully complete commercial testing of new technology and information systems to support new products and services, including voice transmission services; failure to stabilize or reduce the rate of price compression on certain of the company’s communications services; failure to integrate strategic acquisitions and changes in government policies or regulations of India and, in particular, changes relating to the administration of Tata Communications’ industry; and, in general, the economic, business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements, many of which are not in Tata Communications’ control, include, but are not limited to, those risk factors discussed in Tata Communications Limited’s Annual Reports. The Annual Reports of Tata Communications Limited are available at www.tatacommunications.com
. Tata Communications is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements.